Monday, February 29, 2016

Sentient Technologieshas
patented evolutionary and perceptual capabilities that provide
customers with highly sophisticated solutions, powered by the largest
compute grid dedicated to distributed artificial intelligence. The
company also has a war chest of $143 million in venture investment, the
most of any artificial intelligence company. Antoine Blondeau
founded Sentient Technologies nearly nine years ago, though it was in
stealth mode for the majority of that period.

After stints at Salesforce.com
and Good Technology was looking for the next challenge. He had been
involved in artificial intelligence for 15 years, making him an early
pioneer in the field, and already had hit a home run by being involved
in developing the technology that would become Siri, of iPhone fame.

Blondeau claims we are still in the very early days of artificial
intelligence’s evolution, but his vision is to create technology that
will mimic the human interaction. One of the first uses of the
technology is in retail, replicating the experience of having a
sophisticated advisory helping to curate your shopping experience. In
this interview, Blondeau provides his vision for the company, his
thoughts about the future of AI, the balance between AI innovation and
AI safety, as well as a variety of other topics.

(To listen to an unabridged audio version of this interview, please click this link. This is the fourth article in a series on leaders in artificial intelligence, which includes interviews with Mike Rhodin of IBM Watsonand Sebastian Thrun of Udacity. To read future articles in the series, please click the “Follow” link above.)

High: Artificial intelligence seems to be gaining
tremendous momentum, whether it is venture capital, media coverage, or
simply progress that is obvious in the world. There are clearly a
couple of trends that have made this possible in recent years: the
emergence of relatively low-cost available computing power and the vast,
growing abundance of data that companies in every industry are
collecting. I think I have heard you say that we are in the first inning
here of the game, as so much innovation is ahead of us. As somebody who
got into this 15 to 20 years ago, long before this boom, where do you
see things now, and how do you think things are evolving?

Blondeau: You are right on the money when you talk
about what has happened over the past five or seven years that is making
this possible. Some of the team members and I worked on the precursor
to what became Siri. At the time, we were thinking of an algorithm
running on one machine or a few machines. What has happened over the
past few years is that you have the data, it is broadly available, and
one of the things that we foresaw was not only that data would explode
but the dimensionality of data would explode. It will connect a lot of
types of data that had not been connected before. That is a big help.

The second thing is that we have moved from thinking of the machine
being the compute to the network being the compute, which means that we
can harness an enormous amount of compute cycles. In our case, that
means running our system on up to two million CPU cores. We also have a
few thousand GPU cores. It is a massive system. When we thought of this
company seven years ago, we had the vision forward, but could not quite
imagine how we could get there. I think now we can.

The last thing is that when you begin to think about the scale, you
can begin to address problems that you had not thought were solvable
previously. The ambitious nature of what you do can go up significantly.
You can tackle dimensionality, you can tackle complex decision making.
Effectively, you are looking at comprehensively including every step of
decision making in the machine, or in this giant network machine, which
previously was not something thought of as possible. That is the high
level.

High: I would like to dive a bit further into the
details of how this becomes reality, and how that has impacted the way
in which you have thought about entering different markets. I have heard
you speak about the applications in some of the primary industries
where there are tremendous amounts of data and where there are
particularly big problems to solve, like financial services and
healthcare. I found it interesting that one of your first areas to apply
Sentient Technologies is in retail and online shopping. I would love to
understand further how you have chosen where to focus.

Blondeau: One of the things we did was building a
powerful platform, but you never succeed by building a platform. You
need to apply it to know that it is working and scales to multiple
industries. So, we decided to monetize it to address trading, aspects of
e-commerce, and the online content discovery experience, as well as, at
the research level, institutions like MIT, University of Toronto, and
Oxford to work on less immediately monetizable problems, but world
problems nonetheless. I am talking here about genomics and patients in
an ICU context.

In each case, the common denominator is a few things. One, can you
try to solve a problem that has not been solved before? The complexity
of the decision making process is key here. The second thing is can you
encapsulate the whole decision making process within the machine?

Continued from page 1

Let me give you an
example. In e-commerce, our product which was released more than a
quarter ago, we are looking at effectively providing the user with a
shopping assistant, just as if he or she were to walk into a store and
be interacting with a real physical shopping assistant. That involves
that feedback loop from entering the shop, virtually in this case, to
getting an instantly curated version of the catalog. That is something
that in the real world takes a human a lot of processing to achieve. It
is immediately, in the moment, understanding what the user’s intent is,
and reacting quickly to that. That means, effectively, understanding how
the user is interested or looks at the array of choices that he or she
sees in the shop. We are taking that paradigm and putting it into the
online world. In our case, we are building this giant dynamic matrix of
the shop’s inventory.

If you look at a shop that may have five, ten, or twenty thousand
pairs of shoes in its catalog, it is virtually impossible for you, the
user, to discover that in a meaningful way. You can do selective
discovery, perhaps, by browsing through rows and rows of images, but
effectively, you are going to quickly get lost and go away or make a
sub-optimal choice. What we are saying is that there is no reason why
this catalog cannot behave like a shopping assistant would, which means
intelligently responding to how you browse and walk through it. If you
click on an image that describes a particular shoe, this is meaningful.
It means you are interested in it. What is it that you are interested
in? Well, it may be something that you or I would be able to describe in
meaningful words, like a color, texture, shape, or something more
subtle that even you or I would not be able to describe but may be
meaningful to that user.

We say a picture is worth a thousand words. That is what we are
trying to achieve. We are trying to show you articles and items that are
relevant to you, and will mean a lot to you, just like a shopping
assistant would in real life, because he or she understands your intent....MUCH MORE

With news that Argentina has reached an agreement on its defaulted bonds with Singer and other bondholders the question naturally arises: What of Alphaville's 86-part (!) Pari-passu saga series? Is this it?
Will there be any more installments in the series?
I think we know the answer.

In the words of Ted Kennedy:

"...The work goes on, the cause endures, the hope still lives, and the dream shall never die."

They have reached agreement days after Judge Thomas Griesa said he would lift his injunction on Argentina to pay holdouts alongside restructured bondholders, which had set off this saga and (along the way) an Argentine sovereign default.

The holdouts would get 75 per cent of their claims on Argentina. Its offer this month, made both to holdouts with judgments on defautled bonds and those building up hefty post-dated interest on pre-judgment debts, had been 70 per cent. (It also paid another holdout 100 per cent of his claim to settle, of course.)

The difference is likely to be more than 5 per cent as Argentina’s specific treatment of that post-dated interest had been a big issue. Argentina will also be paying the holdouts back certain legal fees which, in a litigation which has taken the best part of a quarter of a century, may not be minuscule. Under a deal, Argentina would have to repeal a law against paying holdouts, and issue bonds to raise cash for payment.

According to Mr Pollack (who gets quite emotional in his statement about “nothing short of heroic” President Macri of Argentina and Elliott’s Paul Singer, “a tough but fair negotiator”):

No party to a settlement gets everything it seeks. A settlement is, by definition, a compromise and, fortunately, both sides to this epic dispute finally saw the need to compromise, and have done so.
We’ll be analysing the deal, where we go from here, and whether this saga will bloody end at last later this week.

For investment banks, blockchain technology looks as much foe as friend. The use of multi-computer databases like that used by the cryptocurrency Bitcoin could cut costs, by automating labour-intensive tasks and stripping out other capital market intermediaries. But it may also eat into revenue.

At its essence, a blockchain is an immutable record of exchanges of data, money, goods or services that sits on a network of computers. This shared ledger is stored simultaneously on the computers involved, which must first validate and then agree to any changes. This makes fraud acutely hard to perpetrate without majority control of the network. And data security and privacy are enhanced through the use of two types of cryptographic keys: a public one that can be accessed by the computers identifying the transactions, and private ones that belong solely to the buyers and sellers involved.

Capital markets banks see this as a big opportunity. In theory, blockchains could do away with much of the business performed by fee-charging third-party overseers like clearers and custodian banks. The former vouch for counterparties’ credit positions, while the latter transfer cash from one account to another.

With investment bank-run blockchains, these credit-checking, margin-call and settlement processes could conceivably happen automatically as part of the transaction itself. Instead of needing intermediaries to give it their blessing, the computers at the participating broker-dealers would be the sole signatories required. The main function of custody banks BNY Mellon and State Street would thus become redundant. Private sector clearing houses like LCH.Clearnet, CME Clearing Europe and the Depository Trust & Clearing Corporation could also conceivably lose business, though they might still be needed to sanction complex derivatives or multi-asset class transactions.

Banks could benefit in other ways too. There would be less need for the thousands of middle and back-office staff that the typical broker-dealer employs. Deutsche Bank as of December employed as many as two-thirds of its 28,280 investment bank staff in such roles.

All of that implies big cost savings. Separate studies by consultancy Accenture and Spain’s Santander each reckon blockchain technology could save $20 billion in annual costs, although the management consultancy sees that total as applying for the whole securities industry and the Spanish lender views it as applying to just banks. Accenture also says that those cost savings could be as much as a fifth of banks’ IT expenses.

Even so, the potential savings may not be all that material. Investment banks typically spend about a third of their total cost base on IT, including technologists’ salaries. That means blockchain-related savings could have pushed up the industry’s 2015 return on equity, excluding exceptionals, to 10.4 percent, according to Breakingviews’ calculations based on Coalition data. A handy bump, but only just above a cost of equity most analysts put at about 10 percent....MORE

Not the first few paragraphs, we've thought about plan B quite a bit, including a couple posts-in-waiting should the U.S. try to go that route. Rather, the question of whether China would recognize a breakaway Texas had not occurred to me.

The house of international law could be shaken to its foundations if Secretary of State John Kerry removes a critical cornerstone that holds it together.

Kerry says that if the Syrian ceasefire breaks down, he has a plan B to partition Syria along ethnic and religious lines. If this happens, will it signal the end of the Westphalian concept of sovereignty? That is, the legal concept that establishes the rule of nation states over their own territories and domestic affairs as a guiding principle of international law?

If so, would the UN then need to adjust its charter to foster new norms of sovereignty based on ethno-religious lines rather than territorial integrity? That is, rather than exercising fixed sovereignty within a bounded territorial space, would the new concept of flexible sovereignty now be able to expand or contract in territories with similar or dissimilar ethnic and religious groups?

In this case, would large countries with multi-ethnic and multi-cultural identities such as China, Russia, India and other nations adhere to this new norm?

These are some questions that would have to be addressed if Kerry’s Plan B is implemented.

As Jacob Zenn from the Jamestown Foundation pointed out, China is concerned by “the prospect of re-shaping the borders in the Middle East that could lead to new conceptions of sovereignty and statehood — not only in that region but elsewhere throughout the Islamic world, including Central Asia and Xinjiang.”[1]

In a Russia already lamenting over the disintegration of the former Soviet Union, Putin is likewise concerned by the possibility of a further break up of the North Caucasus under jihadist pressure.

India’s partition debacle

India, for one, has already experienced partition based on religion. In 1947, colonial India was separated into a Muslim majority Pakistan and a Hindu majority India, with East Pakistan further splitting into Bangladesh.

However, partition didn’t douse their enmity — which eventually prompted both countries to become nuclear weapons states.

Moreover, if sovereignty were no longer based on the norm of territorial integrity (in addition to ethnicity and religious belief), would other differences such as political beliefs or preference for different forms of governance be legal grounds for annexation or secession of territories?

Will Texas secede?

In the US, the state of Texas has been trying to secede from the union.

Lacking confidence in the long-term economic viability of the federal government and perceiving an increasingly left-leaning, Marxist-driven management in Washington, the Texas State Legislature announced in June 2015 that approximately $1 billion worth of state-owned gold bars currently held in the Federal Reserve’s Manhattan vault, will be kept within its own borders.[2]

Edwin Truman, a senior fellow at the Washington-based Peterson Institute for International Economics observed that “Just moving it [the gold] would be pretty expensive and, unless Texas is anticipating withdrawing from the Union, which I suspect is (what) some (people) want, I don’t see what advantage it is.”

On the flip side, an attempt to put a non-binding proposal on a primary ballot, asking Texas Republicans if they would support secession was rejected by the State Republican Executive Committee on Dec. 5, 2015.

The proposal reads: “If the federal government continues to disregard the Constitution and the sovereignty of the State of Texas, the State of Texas should assert its status as an independent nation.”

Texas is referred to as “The Lone Star Republic” for a reason — it was an independent nation from 1836 to 1845, and its separatist movement has attracted Russia’s attention.[3]

Russian state media has also taken the Crimea-as-Texas analogy and sprinted with it — noting how both had originally split off from Russia and Mexico.

In early 2015, when the US was waffling about whether to militarily intervene in the European theater, the speaker of Chechnya’s parliament, Dukuvakha Abdurakhmanov, warned that should the US boost arms deliveries to Ukraine, “we will begin delivery of new weapons to Mexico” and “resume debate on the legal status of the territories annexed by the United States,” which are now the US states of California, New Mexico, Arizona, Nevada, Utah, Colorado and Wyoming.[4]

By coincidence in July 2015, the Pentagon began conducting a large-scale military exercise called Operation Jade Helm, with a map covering similar states in the Southwest.[5]

China, often suspicious that the US doesn’t support its “One China Policy” over Taiwan, Tibet and Xinjiang, also reminded Washington about its own sensitivities towards Texas and other southwest territories at the time.

China won’t intervene in Texas

Hoping the US would extend the quid pro quo, Senior PLA Colonel Liu Mingfu signaled in a piece in The China Dream, “If any part of the United States declares independence or wants to secede, China will not intervene, or establish a regional relationship with that portion of the United States, nor will China provide it military aid.”

At the same time, if Syria were to be partitioned along ethnic and religious lines, China would be concerned by how this impacts the legitimacy of its “core interests” based on the Westphalian concept....MORE

Natural Gas Futures--- Natural gas futures in the April contract is sharply lower this Monday morning in New York down 9 points hitting a fresh contract low currently trading at 1.70 as record temperatures across the Midwestern part of the United States is sending prices to new lows. I have been recommending a short position from around the 2.15 level and if you took that trade place your stop loss above the 10 day high which stands at 2.03 as the chart structure will start to improve later this week therefore lowering monetary risk as prices have absolutely crumbled over the last several weeks. Natural gas prices are trading far below their 20 and 100 day moving average telling you that the short-term trend clearly is to the downside, however if you have missed this trade move on as the risk/reward is not in your favor at this time....MORE

Two of the largest US shale gas producers have said oil recovering to
$40 per barrel will reverse the ailing industry’s fortunes.

Continental Resources could increase capital spending if US crude
reaches low-to mid-$40s, allowing it to boost production by 10 per cent
next year, chief financial officer John Hart said last week.

Whiting Petroleum also said oil at $40 to $45 would allow it
to re-start activity on some of the wells its due to abandon next
month, Reuters reported.

While the US shale gas industry has remained surprisingly
resilient to low oil prices, the cracks are beginning to show. Last
week, the two companies announced plans to halt fracking operations in
Bakken, an area which has been one of the biggest drivers of the US
shale gas boom.

Nevertheless, the comments by Continental Resources and Whiting suggest
that the industry could bounce back more quickly than current
expectations. Less than a year ago, major shale firms were saying they
needed oil above $60 a barrel to produce more....MORE

The People’s Bank of China announced a 0.5 percentage point cut in
the capital that bank are required to keep on reserve with the central
bank, effective March 1. The measure to cut what is referred to as the
RRR frees up an estimated $108 billion worth of funds. Still, the move
surprised investors. In recent weeks, central bank officials signaled
that they preferred to use open market operations and other targeted,
short-term tools rather than relatively high-profile measures such as
cutting interest rates or the reserve requirement, which risk weakening
the yuan’s value. Here are some economists’ reactions to the latest
move, edited for length and style.

China’s cut in required bank reserves underscores the growing
tension that will be played out this year between economic
restructuring and growth. The cut comes immediately after this
weekend’s Group of 20 meeting in Shanghai in which G-20 members endorsed
China’s more accommodative stance even as they urged Beijing not to
devalue the yuan. This cut seems like it ticks off both of those boxes. –Tim Condon, ING Group

The central bank’s move to lower reserve requirement ratio is
a surprise to the market after it injected trillions of yuan liquidity
via open market operations. The PBOC previously indicated that
it would avoid an RRR cut as it would put further downward pressure on
the yuan. But now it went back to its traditional tool as some of these
open market operations would mature this week. The easy solution for
this is to cut the RRR, which can also help stabilize market
expectations. –Larry Hu, Macquarie Capital Ltd.

The move underscores a message that officials have repeated
in recent days, including at the G-20 meeting: policymakers still have
room to support the economy. This move suggests there is still a
bias towards supporting the economy. Also, the explicit mention in the
statement of supporting credit growth is significant. For now, the
emphasis is on shoring up growth in the near term. Finally, today’s move
suggests that the PBOC is more relaxed about capital outflows than a
few weeks ago. –Mark Williams, Capital Economics

I signed up for the free LinkedIn years ago. I don’t do too much
LinkedIn surfing. I do delete the email I get from the company. I had
one of the goslings post a list of my articles to see what would happen.
(Results of the test: Nothing happened.) I find it amusing that
marketers and PR “professionals” want to be my LinkedIn contact. I used
to write these folks and ask, “Why do you want to be my LinkedIn
friend?” (Results of the test: No one writes back.) Now you know why I
don’t do much LinkedIn surfing. No, I don’t read the musings of the
firm’s “thought leaders.”

The problem stems from each of the company’s revenue
streams, which ultimately diminish the business value of using the
service. Whether it’s being paid to promote content, focusing on sales
and recruitment over other professions, or interruptive advertising,
these streams incentivize poor behavior by individual users on the site.

I like that “poor behavior” and the incentive angle. The concrete foundation of LinkedIn, it seems to me, is spam.

The company, according to the write up, has a reason to face each day with a big smile:

The company still has assets that are the envy of any tech company — a vast user base and a wealth of content to exploit.

As Yahoo’s publishing experiment demonstrates, content may not be enough.

I think the larger issue is the fact that social networks often lose
their stickiness after a period of time. Google’s social efforts seem to
mirror the challenges of MySpace. LinkedIn may find itself trapped by
its own job hunting system choked with marketers’ leading thoughts.

Why not drive for Uber, Lyft, or Amazon? Less spam and probably a
shorter path to some real cash. By the way, did you ever try to locate
something using the company’s search engine? Quite a piece of work is
that.

Stephen E Arnold, February 29, 2016

Speaking of which, I forgot to note that last week Dilbert's Asok had given notice to the pointy-headed boss:

Sunday, February 28, 2016

Our model (best guess) says no recession but is iffy on a 20% drawdown in equities. The S&P 500's undercutting of the August lows in both January and February gives one pause. Plus there's that Feb. gap that didn't get filled.

On the other hand, Wein is a very smart guy who's been at the market a very long time, i.e. Blackstone doesn't keep him around for his dashing good looks.

That all-time high on the S&P was 2134.72 so a 20% haircut is 1707.77.

From Barron's Wall Street's Best Minds column:

The Blackstone strategist writes that stocks will benefit from oversold conditions. But he’s no raging bull.

While I began this year with a cautious view
of the financial markets, I did not expect the swift market declines
that we have all experienced. At one point, the Standard & Poor’s
500 was down 10% year-to-date. The recent weakness is clearly supported
by some serious economic problems which I will explore. My conclusion,
however, is that we will not endure either a bear market or a recession
this year, and I will try to defend that position in the course of this
essay.

In the current investment
environment, it is easy to give up hope. Stock markets around the world
have fallen sharply since the beginning of the year because of many
factors. Monetary accommodations by central banks almost everywhere have
done little to boost economies or arrest the plunge in equities.
Investors are so anxious to hide from risk assets that they have pushed
yields in developed markets down to extremely low levels or even
negative rates. Designed to encourage consumer spending and bank
lending, negative rates have some positive effect in the short term, but
the long-term benefits are not clear. While the data on the performance
of U.S. and European economies indicate that modest growth is
continuing, the fear is that turbulence in the financial markets will
cause businesses and individuals to curb their spending and a global
recession will begin later this year. The fact that manufacturing is
already in a recession in key areas raises the question of whether other
sectors of the world’s economies are strong enough to keep even slow
growth alive.

Perhaps it all started with China. While
official numbers reported suggest strong growth is continuing, almost
every observer believes that a slowdown of some significance is taking
place there. The negative view is supported by data on exports, imports
of raw materials, electricity consumption, retail sales and capital
spending.

The good news is that the
Chinese economy is rebalancing. Growth was too dependent on capital
expenditures for state-owned enterprises and infrastructure. Debt
incurred to fund those projects had increased to unsustainable levels
and there was concern that the banks held many non-performing loans. The
economy could not continue to move forward on that basis; consumer
spending had to overtake capital spending as it has in most western
economies.

This process is underway, but
during the transition period and perhaps beyond, growth will slow. An
expectation that the second largest economy in the world will continue
to grow at seven percent is unrealistic; four to five percent is more
realistic. China’s growth is critical. When it was growing at seven
percent, it accounted for 25% of the increase in world GDP. China is
still creating more than ten million jobs annually, bringing people out
of the agricultural countryside and into challenging but more
financially rewarding urban settings. Its current leader, Xi Jinping, is
determined to purge corruption from the leadership ranks. The Chinese
population is supportive of the current regime and that is an important
positive. If the fiscal and monetary stimulus program falls short, a
devaluation of the currency may be used to stimulate exports. Many,
including myself, expect that to happen later this year, but lately the
authorities have been using China’s considerable foreign currency
reserves to prop up the yuan. This effort caused the yuan to rally
sharply in February and, as a result, China’s $3 trillion plus in
reserves is being drawn down $100 billion a month.

The
decline in the price of oil may be the major factor causing the current
financial market volatility. Initially, lower oil prices were viewed as
an economic positive. Consumers would have more money to spend, retail
sales would improve and real growth in developed economies that import
oil would increase. As it turned out, only half of the money saved at
the pump was spent elsewhere; consumers paid down debt with, or banked,
the other half. The more worrisome aspect of the decline in the price of
oil was its impact on capital spending and the credit markets. The rig
count dropped by 70% and the bonds of marginal exploration and
development companies collapsed. This raised questions about the
financial condition of some of the major lenders to the energy industry,
causing financial stocks everywhere to suffer declines. In Germany,
Deutsche Bank stepped in to buy $5.4 billion of its bonds to prove its
financial condition was “rock solid.” Still, investors expected some of
the major established energy companies to cut their dividends....MORE

The WSJ claim that removing the $100 bill is a threat to free
enterprise is, of course, nonsense. However, while the specific facts
supporting the case are convincing, the conclusion itself may
be unwarranted without further addressing the following questions.

The Sands paper notes that 25 to 70% of $100 bills are held abroad.
Even assuming that 100% of the lower bound is used in strictly illicit
activity, that leaves $750 billion in clean hands. If the premise of the
argument is that HDNs make crime easy – and that criminals pay a
premium on the order of 5-10% for this subsidy – then existing $100
bills will float towards criminals. Ending future issuance of this note
(I assume this is not a mandatory exchange as Summers writes about
“ending the further issuance”) doesn’t seem likely to rival the natural
market equilibrium as benign users let their notes fall in criminal
hands. Sure the premium paid might go up, but there is a large stock
pile, so to speak.

In 2016 the Fed plans to print $150 million worth of $100 bills,
or in other words ending future issuance for the next 2000-5000 years
would balance the non-foreign / criminal portion of the $100 held
(depending on your estimates). Now if only criminals benefit from the
convenience, the remaining balance would easily float over with little
extra cost. If this isn’t the case it means the innocent users of $100
benefit from its convenience somehow – a market-based claim that can’t
be ignored by simply stipulating otherwise.

There is an information tradeoff. Imagine if criminals transacted
only in $10,000 notes. It would be reasonably easy for intelligence
agencies to sneak a traceable note to probe criminal networks. This
would be close to impossible with a $20 note (not the least because this
is a high velocity note used by normal people).

Citing the high use of $100 among criminals doesn’t mean much. Of
course criminals use the lightest / most compact / highest denomination
currency at their disposal. Therefore suggestions along the lines of “n%
of criminal activity is transacted in $100 bills” mean little because
if we got rid of the $100 and managed to avoid the problems noted in
point (1) it would be the case that “n% of criminal activity is
transacted in $20 bills”.

Consider
the proposed premiums for $100 bills. For one, if the numbers were this
high it further emphasizes the point made in (1). But importantly, they
seem a little too large to be only about the denomination.
There is a large liquidity premium. (I bet criminal FX markets in
Argentina don’t have much in the $1 note inventory). People transacting
in smaller notes – like innocent Argentinians avoiding a tyrannical
government – are unlikely the balance, “marginal”, consumers of dollar
bills. Furthermore, given that transaction with a criminal is likely
more heavily penalized than transaction with a bystander, this implicit
tax is built into the premium. I have a hard time believing $100 is 10%
cheaper due only to transportation and convenience....

Saturday, February 27, 2016

In a virtuoso experiment, physicists have revealed details of a “quantum
critical point” that underlies high-temperature superconductivity.

The 90-tesla magnet system at the National Laboratory for Intense Magnetic Fields in Toulouse, France.

The energy equivalent of several
kilograms of TNT surged into the coil, bathing the 0.003-carat crystal
in its bore in one of the strongest magnetic fields ever generated.

From the magnet came a small boom like the sound of a foot stomping, said engineer Jérôme Béard — but thankfully, no explosion. His calculations held up.

With that magnetic blast and a
subsequent series of identical ones executed last winter, researchers at
the National Laboratory for Intense Magnetic Fields (LNCMI) in
Toulouse, France, uncovered a key property of the crystal, a matte-black
ceramic in a class of materials called cuprates that are the most
potent superconductors known. The findings, reported today in the journal Nature,
provide a major clue about the inner workings of cuprates, and may help
scientists understand how these materials allow electricity to flow
freely at relatively high temperatures.

“Technically amazing,” said J.C. Séamus Davis,
an experimental physicist with appointments at Cornell University, St.
Andrews University in Scotland, and Brookhaven National Laboratory who
was not involved in the experiment. “The paper is a masterpiece.”

The experimental team, led by LNCMI staff scientist Cyril Proust and Louis Taillefer
of the University of Sherbrooke in Canada, used their 90-tesla magnet —
which creates a magnetic field nearly two million times as strong as
the one enshrouding Earth — to momentarily strip away superconductivity
in their cuprate sample. This revealed details of the underlying phase
from which the behavior seems to arise.

With the veil lifted, the scientists
discovered a sharp change in behavior at what appears to be a “quantum
critical point” in cuprates, reminiscent of the freezing point of water.
Theorists have long speculated that such a quantum critical point might
exist, and that it could play a key role in superconductivity, said Andrey Chubukov,
a condensed-matter theorist at the University of Minnesota. “One thing
is to say this; another thing is to measure it,” Chubukov said.

Superconductivity is a phenomenon in
which electricity flows without resistance from the material it moves
through, so that no energy is lost in the process. It occurs when
electrons (the negatively charged carriers of electricity) unite to form
pairs, balancing each other’s properties in a way that allows them all
to move in unison. The phase in which this happens is delicate,
typically occurring only when a material is cooled to rock-bottom
temperatures. But if wires could be engineered to act as superconductors
at room temperature, experts say the lossless electrical transmission
would greatly reduce global energy usage and usher in a host of new
technologies, such as magnetically levitating vehicles and cheap
water-purification systems.

The force driving superconductivity is strongest in cuprates. As IBM researchers Georg Bednorz and K. Alexander Müller discovered in 1986
(in work that earned them Nobel Prizes the following year), cuprates
superconduct at much higher temperatures than other materials,
suggesting that their electrons are paired by a different and stronger
glue. But cuprates must still be cooled below minus 100 degrees Celsius
before they become superconductive. The glue must be further
strengthened if superconductors’ operating temperatures are to be dialed
up. For 30 years scientists have asked: What is the glue — or, more
precisely, the quantum mechanical interaction between electrons — that
causes superconductivity to arise in cuprates?...MUCH MORE

Cliff Asness’ approach has helped make AQR’s liquid-alt mutual funds among the best in the business.

Since U.S. stocks peaked in July, few investments have produced strong
returns. Global stocks, junk bonds, and most commodities have
declined—in many cases, sharply. And many so-called alternative
investments have failed to provide hoped-for diversification benefits.
Just look at the big losses suffered by some notable hedge funds.

The situation hasn’t been much better among
liquid alternatives, or mutual funds that use hedge fund strategies such
as merger and convertible arbitrage, long/short equity, and
trend-following in futures markets. Yet, against this tough backdrop, a
bunch of academics are delivering. Their firm, AQR Capital Management
(AQR stands for applied quantitative research), is a distinctive
investment manager with $141 billion in assets that seeks to translate
academic insights about finance and the markets—such as the appeal of
value and momentum investing—into winning quantitative strategies for
institutional and retail buyers.

Nearly
all of AQR’s liquid-alt mutual funds are in the black since late July,
including the industry’s largest fund, the $11 billion
AQR Managed Futures Strategy
(ticker: AQMIX), which is up 7% through mid-February, against an
11% drop in the Standard & Poor’s 500 and a 16% decline in the MSCI
World index over the same period (see chart, below). “This has been one
of the periodic reminders of the benefits of diversification. There has
been a view since the market bottom in 2009 that all you needed was the
S&P 500 index,” says David Kabiller, a founding principal of the
18-year-old firm, based in Greenwich, Conn. The other two founding
principals are Cliff Asness and John Liew.

Indeed, the stock market selloff since the
start of this year has shaped up as a key test of whether liquid alts
can deliver the promised diversification and protect investors during
downturns. Liquid-alt funds have been rightly criticized for generally
disappointing returns during the recent bull market—and high fees, to
boot.

The performance of AQR’s
liquid-alt funds has been good so far this year, with most in the black
and besting many big rival funds (see nearby table). “What has happened
this year is a nice data point that we are doing what we say,” says
Asness. “I’m proud of what we’ve done, but I want to be intellectually
honest. One data point doesn’t prove a concept, and I look forward to
proving it many more times.”

AQR’s staff of more than 600 boasts 52
Ph.Ds, including Asness, who was Eugene Fama’s student and teaching
assistant at the University of Chicago. Fama, a Nobel laureate and
former student of Milton Friedman, is known as the father of
efficient-markets theory. The AQR academics would stack up well against
the finance faculty at major universities. This brainpower is harnessed
to develop and execute quantitative strategies that can generate
market-beating returns. “You would be surprised how much effort it takes
to turn the academic into the practical. Making money for clients
involves controlling costs, managing risk, and building real portfolios.
Academic work is just the tip of the iceberg,” says Liew.

AQR
is the largest manager in the fragmented, growing, and controversial
liquid-alt market. The firm had $17 billion in liquid-alt assets, plus a
smattering of long-only strategies, with total fund assets of $23
billion at year-end 2015. It is the liquid-alt industry’s biggest
grower, with $7 billion of inflows since the start of 2015. The industry
totals $170 billion, excluding go-anywhere, unconstrained bond funds.

“AQR
is the clear leader in delivering alternative strategies to retail
investors,” says Morningstar analyst Jason Kephart. “It has developed
strategies that move to their own beat and fulfill the promise of
delivering uncorrelated returns that will diversify a traditional
portfolio.”

Affiliated Managers Group
(AMG), which holds stakes in more than 30 investment managers,
including Harding Loevner and Yacktman Asset Management, owns an
undisclosed minority interest in AQR. The firm is among the largest and
most successful managers in AMG’s portfolio....MUCH MORE

Emerging-market assets are so cheap that they may be “the trade of a
decade,” according to Research Affiliates LLC, a sub-adviser to Pacific
Investment Management Co., one of the world’s biggest money managers.

They’re
joining a growing number of investors, including BlackRock Inc.,
Franklin Templeton and Goldman Sachs Asset Management, who are turning
bullish on emerging markets after three years of underperformance. With
borrowing costs at the highest levels since the depths of the global
financial crisis, bond investors are being compensated for challenges
ranging from falling commodity prices to China’s economic slowdown,
BlackRock said Tuesday.

“The exodus from emerging markets is a wonderful opportunity -- and
quite possibly the trade of a decade -- for the long-term investor,”
Christopher Brightman, chief investment officer at Research Affiliates,
said in a post on Pimco’s website Wednesday. “We are increasingly confident of our positioning in emerging market stocks and bonds.”

‘Exceptionally Cheap’
Developing-market
securities accounted for 35 percent of the Pimco All Asset Fund and 39
percent of the Pimco All Asset All Authority as of Dec. 31, according to
Brightman, who is based in Newport Beach, California. The two funds,
managed by Rob Arnott who co-founded Research Affiliates in 2002, had
combined assets of about $29 billion at the end of January, data
compiled by Bloomberg show.

Brightman said emerging-market stocks
are “exceptionally cheap” after MSCI Inc.’s benchmark gauge declined 30
percent over the past three years.

He pointed out that the
so-called Shiller P/E Ratio, a measure of valuation based on cyclically
adjusted price-to-earnings ratio, fell to 10 in January. There have been
only six times when the measure has dipped below 10 over the past 25
years. In the following five years, the stocks rallied an average 188
percent, according to Brightman, who oversaw the endowment at the
University of Virginia before joining Arnott’s Research Affiliates....MORE

Marking down Palantir, one of the extremely rare (former) Double Decacorns is a big deal.
From Fortune:

Another sign of a cooling market for high-flying startups.

A Morgan Stanley mutual fund has marked down
the value of its shares in high-profile data crunching company Palantir
by 32%, highlighting the darkening cloud over many of Silicon Valley’s
billion dollar startups.

The lowered share valuation, first reported by technology news site The Information,
comes as technology companies face increased investor skepticism. Even
elite startups like Palantir, valued at nearly $20 billion in its latest
funding round in July, are being caught in the recent turbulence.
Morgan Stanley’s Institutional Fund Trust Mid Cap Growth
Portfolio mutual fund, whose stake in Palantir is now worth $45 million,
disclosed in a filing that it had reduced the value it assigned to
Palantir’s shares to $7.70 as of December compared to $11.38 at the
company’s most recent fundraising round.

Morgan Stanley’s fund invested in Palantir, a part of a
group of highly valued tech startups known as unicorns, in 2012 and
2013....MORE

This follows on news reported last week that someone was posting flyers around Palantir HQ that said employee stock was worthless. Here's Fortune again, this time from Feb. 24:

Dead Unicorns Are Warning Silicon Valley Workers

There will be blood (and tears.)

For Silicon Valley’s “unicorns,” the writing is
on the wall—literally, flyers warning of their plummeting values are
appearing on walls.

On Wednesday, Quartz reporter David Yanofsky
spotted paper flyers taped around Palo Alto’s University Avenue, a
major artery of tech offices in the city, warning Palantir employees’ of
their worthless company shares. Along with stern statements about
shares of Palantir’s common stock, which are worth $0, according to the
flyer’s author, is a slain unicorn, bleeding rainbow colors.

“Go on a strike or take over the company. Just don’t let
your founders and investors screw you over,” read the flyers, in capital
letters.

Founded in 2004, Palantir is a venture capital-funded company that
provides data analysis software, and whose clients include U.S.
government agencies. In December, it closed a $880 million mega-round of funding,
and it’s currently valued at $20 billion. Palantir co-founder and CEO
Alex Karp has also publicly voiced the company’s desire to remain
private, likely another reason for the flyers’ alarm about the company’s
employee stock....MORE

Friday, February 26, 2016

WTI $33.30 up 23 cents after trading as high as $34.69.
The spike on Jan. 28 got to $34.82, so today was close, but not quite a new high on this go-round.
From Stockcharts:

Crude Oil Update

In the blog post of December 17th titled ‘Crude Oil; How Low Can it Go?’ (click here for a link), we studied the bear market in crude oil of 2008-09, the bull market of 2009, and then the current bear market. The long term point and figure analysis for each of these periods has been very accurate and useful. The 2013-14 top generated a count that carried from $112 to a target range of $28 to $34 which was hard to believe at the time. $WTIC has since melted all the way down to the $27 (lowest PnF box) level before bouncing to $34 for a near direct hit of the PnF count objectives. Have we seen the low for crude oil? Is it time to buy crude oil? What should we expect next?

What has transpired since the prior post is really interesting and a good review of some essential Wyckoffian principles. Where our prior analysis was employing weekly vertical charts and 3-box reversal PnF, here we will zoom in with shorter term charts for a more detailed view. With crude on a glide path for a potential landing, shorter term data can inform how that landing will occur and if there will be a touchdown or a continuation of the decline....

$1.26 at the close on Wednesday, $2.53 last.
Here's the last 10 months action via FinViz:
The double is over there on the right.
Here's the latest, from Bloomberg:

SunEdison, Vivint Surge as Judge Clears Path for Acquisition

SunEdison Inc., the world’s biggest clean-energy developer, rallied
the most in 14 years after a judge in Delaware rejected a plea to block a
portion of its $1.9 billion acquisition of Vivint Solar Inc.
SunEdison
gained 35 percent to $2.32 at 10:09 a.m. in New York, after earlier
surging as much as 61 percent, the most intraday since October 2001.
Vivint rose as much as 38 percent, the biggest gain since the
acquisition was announced in July.

The news dragged down shares of
TerraForm Power Inc., the yieldco unit formed by SunEdison to buy and
operate power plants. As part of the complicated deal, TerraForm has
agreed to pay $799 million to acquire some of Vivint’s assets. That’s
the component of the transaction that was contested in the Delaware case. TerraForm slipped as much as 6.7 percent.

The
ruling will let SunEdison move forward with the Vivint deal, a
transaction that’s been under scrutiny from shareholders and investors.
SunEdison shares have plunged more than 90 percent since announcing
plans to buy Vivint and expand into the residential solar market. The
terms were renegotiated in December and SunEdison has said it wants to
close the deal this quarter....MORE

Good grief, it reads like a press release from an '80's Vancouver deal.
There are higher quality ways to get exposure to the solars should one so desire.

Cheniere’s Sabine Pass ships first LNG cargo from the U.S. Lower 48Sabine Pass,
the first liquefied natural gas (LNG) export terminal to be constructed
in the Lower 48 states, shipped its first cargo of domestically sourced
natural gas on Wednesday. The LNG is being carried aboard the LNG
tanker Asia Vision to Brazil's TRBA (Bahia) offshore terminal.
Sabine Pass is expected to load several commissioning cargos as part of
its start-up process, after which it will need the approval from the
Federal Energy Regulatory Commission to operate commercially.
Previously, the United States has only been exporting LNG from Alaska
and occasionally re-exporting LNG from the import terminals in the Lower
48 states.

Sabine Pass, located in Cameron Parish, Louisiana, has completed
construction of the first two of its six liquefaction trains, each with a
capacity to liquefy 0.55 billion cubic feet per day (Bcf/d) of natural
gas. Commissioning of the first liquefaction train began in the fall of
2015, but several mechanical issues delayed the start-up. Three other
trains at Sabine Pass are currently under construction and are scheduled
to come online in 2017-19, while the sixth train is waiting for a final
investment decision.

Six other liquefaction projects are scheduled to come online this
year in Australia, Malaysia, and Indonesia. They will add approximately
8% to the total global liquefaction capacity, while the two trains at
Sabine Pass will add 2% to the total.

The five LNG export facilities currently under construction
in the United States, including Sabine Pass, will have a total
liquefaction capacity of 9.2 Bcf/d, which is equivalent to 13% of
current domestic natural gas production. Nearly all of this capacity has
been fully or partially contracted
and is scheduled to be in service by 2019. Once all facilities under
construction become operational, the United States will become the
third-largest liquefaction capacity holder in the world after Australia
and Qatar....MORE

Prices/Demand/Supply:Natural gas prices decline. Prices began the week at
low levels and declined further at most locations across the country as
weather was mild and consumption was relatively low. The Henry Hub spot
price fell from $1.91/MMBtu last Wednesday to $1.79/MMBtu yesterday,
February 24. Declines were similar at other major market locations. At
the Chicago Citygate, the spot price fell from $1.91 /MMBtu last
Wednesday to $1.80/MMBtu yesterday. At the SoCal Citygate, prices fell
from $1.91/MMBtu last week to $1.87/MMBtu yesterday.

Northeast prices decline. Prices in the Boston area
declined substantially this week on warmer temperatures. At the
Algonquin Citygate, which serves Boston, prices fell from $4.18/MMBtu at
the beginning of the report week to $1.70/MMBtu yesterday. At
Transcontinental Pipeline’s Zone 6 trading point serving New York City,
prices began the week at $2.12/MMBtu, and ended the week at $1.78/MMBtu.
Transco’s Zone 6 non-New York trading point, which serves Pennsylvania
and New Jersey consumers, began the report week at $2.03/MMBtu and
settled yesterday at $1.74/MMBtu.

Marcellus prices fall. At Dominion South in
northwest Pennsylvania, prices began at $1.53/MMBtu last Wednesday and
ended the report week at $1.36/MMBtu yesterday. On Transco's Leidy Line
in northern Pennsylvania, prices remained flat, beginning and ending the
report week at $1.32/MMBtu.

Nymex prices fall. The price of the Nymex March 2016
contract fell this week from $1.942/MMBtu last Wednesday to
$1.778/MMBtu yesterday. The price of the 12-month strip (the 12
contracts between March 2016 and February 2017) fell from $2.299/MMBtu
last Wednesday to $2.144/MMBtu yesterday. Earlier today, on the final
day of trading for the March contract, the price settled at $1.711.

Production falls slightly. Dry natural gas
production fell 0.2% from the previous week, but remained 2.9% greater
than the same time last year. U.S. imports of natural gas from Canada
declined by 24.4%. Pipeline imports to the Northeast, Midwest, and West
all declined substantially. LNG sendout also declined from the previous
week.

Consumption declines. Warmer-than-normal weather led
to a 19.7% decline in U.S. consumption. The large decline was driven by
a 34.0% decrease in residential/commercial consumption, but consumption
declined in all sectors. Consumption of natural gas for electric power
generation fell by 5.9%, and industrial consumption fell by 7.1%. U.S.
exports of natural gas to Mexico fell by 1.2%, but were 38.5% greater
than the same week a year ago....MORE

Peter Sands is a Senior Fellow at the
Mossavar-Rahmani Center for Business and Government at the Harvard
Kennedy School and the former Chief Executive Officer at Standard
Chartered Bank.

Lawrence Summers is a professor at and past
president of Harvard University. He was treasury secretary from 1999 to
2001 and an economic adviser to President Obama from 2009 through 2010.
He serves as an advisor or board member to a number of financial
technology and payments companies.

That last bit about the fintech companies and the payments companies does not appear in Mr. Summers' Feb. 16 blog post "It’s time to go after big money" which addresses the same topic:

It's too early.
Even though we think we'll see some upward price pressure come late summer, after a meandering downtrend, the reality of farmland investment is that it is only worth a multiple of the cash flow.(unless you're on the edge of a metro area and have some non-public zoning info)

From Agrimoney:

Top economist makes case for steady land prices, despite ag downturn

Pressure on US land values may stay constrained despite the
losses many growers face, one of the country's top ag economists said, noting
the extent of farmers' reserves left over from more prosperous times.

Robert Johansson, chief economist at the US Department of
Agriculture, flagged the extent to which land prices had soared during more
prosperous times for agriculture.

IT IS NO SECRET that Saudi Arabia, along with its Gulf and Western allies, has played a direct role
in fueling the fires of grinding sectarian conflict that has kept Syria
burning for the past five years. It is also no secret that Russian
intervention has radically altered the kingdom’s “regime change”
calculus in effect since at least 2011. But an internal Saudi government
cable sheds new light on the kingdom’s current threats of military escalation in Syria.

Overthrow the Regime “by all means available”
A WikiLeaks cable released as part of “The Saudi Cables”
in the summer of 2015, now fully translated here for the first time,
reveals what the Saudis feared most in the early years of the war:
Russian military intervention and Syrian retaliation. These fears were
such that the kingdom directed its media “not to oppose Russian figures
and to avoid insulting them” at the time.
Saudi Arabia had further miscalculated that the “Russian position” of
preserving the Assad government “will not persist in force.” In Saudi
thinking, reflected in the leaked memo, Assad’s violent ouster (“by all
means available”) could be pursued so long as Russia stayed on the
sidelines. The following section is categorical in its emphasis on
regime change at all costs, even should the U.S. vacillate for “lack of
desire”:

The fact must be stressed that in the case where the
Syrian regime is able to pass through its current crisis in any shape or
form, the primary goal that it will pursue is taking revenge on the
countries that stood against it, with the Kingdom and some of the
countries of the Gulf coming at the top of the list. If we take into
account the extent of this regime’s brutality and viciousness and its
lack of hesitancy to resort to any means to realize its aims, then the
situation will reach a high degree of danger for the Kingdom, which must
seek by all means available and all possible ways to overthrow the
current regime in Syria. As regards the international position, it is
clear that there is a lack of “desire” and not a lack of “capability” on
the part of Western countries, chief among them the United States, to
take firm steps…

Amman-based Albawaba News—one
of the largest online news providers in the Middle East—was the first
to call attention to the WikiLeaks memo, which “reveals Saudi officials
saying President Bashar al-Assad must be taken down before he exacts
revenge on Saudi Arabia.” Albawaba offered a brief partial
translation of the cable, which though undated, was likely produced in
early 2012 (based on my best speculation using event references in the
text; Russia began proposing informal Syrian peace talks in January 2012).

Russian Hardware, a Saudi Nightmare
Over the past weeks Saudi Arabia has ratcheted up its rhetoric on
Syria, threatening direct military escalation and the insertion of
special forces on the ground, ostensibly for humanitarian and
stabilizing purposes as a willing partner in the “war on terror.” As
many pundits are now observing,
in reality the kingdom’s saber rattling stems not from confidence, but
utter desperation as its proxy anti-Assad fighters face defeat by
overwhelming Russian air power and Syrian ground forces, and as the
Saudi military itself is increasingly bogged down in Yemen....MORE

Thursday, February 25, 2016

...used on its assembly line in favor of human workers because they can cope with the job better."

From The Register:

Humans 1 robots 0 as Mercedes deautomates production lines

"Robots can't deal with the degree of individualization and the many
variants that we have today," Markus Schaefer, the luxury car-maker's
head of production told Bloomberg. "We're saving money and safeguarding our future by employing more people."

The robot marching papers are being handed out at the
firm's largest manufacturing plant in Sindelfingen, Germany, which
churns out 400,000 cars a year. In line with other auto-makers, the firm
has diversified its car lineup to provide many different options, and
the machines can't cope with the choices available.

"The variety is too much to take on for the
machines," Schaefer said. "They can't work with all the different
options and keep pace with changes."

The firm plans to add 30 new models to its lineup
over the next four years, and that means a lot of customization in the
manufacturing process. All of these will also have individual features
picked by the buyer – from in-car technology to the color of the seats,
and this is best done by human builders, he said.

The production line won't be entirely robot-free,
Schaefer explained, but instead, humans will work side by side with
smaller robots that can handle the main repetitive tasks while German
workers do the tricky stuff. As an added bonus, paid workers can buy
cars, further driving demand....MORE

Biggest Wave Yet of U.S. Oil Defaults Looms as Bust IntensifiesIn less than a month, the U.S. oil bust could claim two of its biggest victims yet.

Energy XXI Ltd. and SandRidge Energy Inc., oil and gas drillers with a
combined $7.6 billion of debt, didn’t pay interest on their bonds last
week. They have until the middle of next month to either pay the
interest, work out a deal with their creditors or face a default that
could tip them into bankruptcy.

If
the two companies fail in March, it would be the biggest cluster of oil
and gas defaults in a month since energy prices plunged in early 2015.

“We’re
just beginning to see how bad 2016 is going to be,” said Becky Roof,
managing director for turnaround and restructuring with consulting firm
AlixPartners.

Debt-Fueled Boom
The U.S. shale boom was
fueled by junk debt. Companies spent more on drilling than they earned
selling oil and gas, plugging the difference with other peoples’ money.
Drillers piled up a staggering $237 billion of borrowings at the end of
September, according to data compiled on the 61 companies in the
Bloomberg Intelligence index of North American independent oil and gas
producers. U.S. crude production soared to its highest in more than
three decades.

Oil prices have now fallen more than 70 percent
from a 2014 peak, and banks and bondholders are fighting for scraps.
Bond prices reflect investors’ fears. U.S. high yield energy debt lost
24 percent last year, the biggest fall since 2008, according to Bank of
America Merrill Lynch U.S. High Yield Indexes. Investors are now
demanding a yield of 19.6 percent to hold U.S. junk-rated energy bonds,
after borrowing costs for these companies exceeded 20 percent for the first time ever this month, according to data compiled by Bank of America Merrill Lynch.

Both
Energy XXI and SandRidge could still reach an agreement with creditors
that will give them time to turn their businesses around. SandRidge said
last week that it missed a $21.7 million interest payment. The company
owes $4.2 billion, including a fully-drawn $500 million credit line.
Energy XXI, which owes $3.4 billion, said in a filing last week that it
missed an $8.8 million interest payment.

David Kimmel, a spokesman
for SandRidge, said it has the money to make interest payments due in
February, March and April. He wouldn’t comment on SandRidge’s options if
it doesn’t make the interest payments by the end of the grace period.
David Griffith, investor relations associate with Energy XXI, did not
respond to an e-mail seeking comment.

Now What?
The
companies’ failing to pay interest on their bonds may be a way to help
motivate creditors to renegotiate debt, said Jason Wangler, an energy
analyst with Wunderlich Securities in Houston.

“It’s a negotiating tool,” Wangler said. “They say, ‘I’m not going to pay you. Now what are you going to do?’”...MORE

I know, I know!
I think the answer is:

"We're going to take away all the assets, shop for a prosecutor to charge you criminally and sue you civilly for common, wire and securities fraud".
"Then we'll see if we can pierce the corporate veil to go after you personally."
"After the foreplay, we're going to..."

Platts' analyst survey had the pull at 144-148 Bcf, that's a pretty big miss.
April futures $1.764 down 7.0 cents after trading as low as 1.747. Here's the 5-minute chart from FinViz:

From Natural Gas Intelligence:

Natural gas futures plunged Thursday morning after the Energy
Information Administration (EIA) reported a storage withdrawal that was
much less than the market had expected.

EIA reported a 117 Bcf withdrawal in its 10:30 a.m. EST release, and the market immediately tested December lows at $1.684.

The EIA also revised last week's withdrawal from 158 Bcf to 163 Bcf,
thus imparting a touch of bullishness to an otherwise highly bearish
report. The expiring March futures contract fell to a low of $1.683
following the release of the storage data, and by 10:45 a.m. March was
trading at $1.686, down 9.2 cents from Wednesday's settlement.

"I think a little bit of money was taken off the table on the dip, but
otherwise the shorts are very comfortable right now," a New York floor
trader told NGI. "The drop put prices below the previous
support in the low $1.70s and is exactly what the shorts were looking
for. We may test $1.61 to $1.63," he said....MORE